Language learning service provider Duolingo (Nasdaq: DUOL) recently announced its fourth-quarter results. The company had listed last summer but has failed to maintain its list price since. It continues to invest in growth by building on its content and user engagement strategy and believes that it can compete with other media streaming players as well. The recent app store price cut is expected to help Duolingo significantly.

Duolingo’s Financials

For the fourth quarter, its revenues grew 51% to $73 million. The company continues to record losses and ended the quarter with a loss of $0.46 per share. Analysts had forecast a loss of $0.58 on revenue of $69 million.

During the quarter, its total bookings grew 59% to $90.8 million, and subscription bookings grew 61% to $69.8 million.

Duolingo ended the quarter with 42.4 monthly active users, up 15%, and daily active users grew 20% to 10.1 million. Paid subscribers grew 56% to 2.5 million.

For the full fiscal year, Duolingo’s revenues grew 55% to $250.8 million, and loss was $2.57 per share.

For the first quarter, Duolingo expects revenues between $75.5 and $78.5 million. For the fiscal year, it expects revenues between $332 and $342 million. The market forecasts revenues of $77.43 million for the quarter and $339.02 for the year.

Duolingo’s Growth Focus

Duolingo has been on a mission to become the “Sesame Street for grown-ups”. It has been investing in content to ensure that it gets there. Last year, Duolingo released a diverse roster of characters that appear throughout its courses. Recently, it upgraded those characters by creating distinctive backstories and voices for them instead of using generic text-to-speech audio for language lessons. It hired casting director Ivy Isenberg, known for Call of Duty and Robot Chicken, to find voice actors to play each character. Duolingo believes that to make the learning on its app successful, it needs to make learning fun. By creating characters that users are able to connect with, it is hoping to lure them away not only from their learning apps, but also from other media players such as YouTube and Netflix.

Additionally, Duolingo continues to build on its language content. It recently announced the launch of its new Haitian Creole course for English speakers. It partnered with multiple Haitian-run restaurants across the US to give away a free month of Duolingo Plus, its premium subscription service.

Duolingo should benefit from the change in the transaction fee announced by both Google and Apple. After Apple announced plans to reduce its AppStore fees by 15%, Google announced plans to reduce its Play Store transaction fees by 30%. Duolingo gets its traffic from both of these marketplaces and the significant fee cuts will improve its margins going forward. Analysts expect Duolingo’s gross margins to improve by more than 5% on account of the change in this fee. Duolingo believes that it will see about 150-basis-points driven by both the reduction in costs on Google Play, and other shift in costs. But it will continue to invest these savings in R&D to drive further market expansion.

Duolingo went public in July last year. It had listed at $102 and was valued at $3.7 billion. Duolingo is currently trading at $80.5, with a market capitalization of $3.1 billion. It reached a high of $204.99 in September last year, and recovered from its low of $70.67 in February.